The album was GBV's first release with Matador Records. According to James Greer's book Guided by Voices: A Brief History: Twenty-One Years of Hunting Accidents in the Forests of Rock and Roll the advance for the record was close to a hundred thousand dollars, one of the more expensive deals in Matador's history. In contrast to the lucrative deal, Greer mentions that "The cost for recording Alien Lanes, if you leave out the beer, was about ten dollars."
In a contemporary review of Alien Lanes, Matt Diehl of Rolling Stone described the album's music as "hooky rock that infuses songwriting smarts and a love of melody with a sometimes spiky, sometimes whimsical sense of experimentation". Caroline Sullivan of The Guardian gave the album a positive review, stating that "Pollard's songs are gems that stay just this side of self-conscious eccentricity". Sullivan noted the songs' lengths, stating that they were "just enough time for Pollard to wheeze a few oblique lines and guitarist Tobin Sprout to trace out a raucous melody."Robert Christgau of The Village Voice was less complimentary, giving the album a "dud" rating.
Mark Deming of AllMusic described Alien Lanes as being similar to Bee Thousand, though without "as many obvious masterpieces" and "fewer obvious mistakes".
Four songs from Alien Lanes appeared on the cover album Sing For Your Meat: A Tribute to Guided By Voices: "A Salty Salute", covered by Superdrag, "My Valuable Hunting Knife", covered by Western Civ, "Game of Pricks", covered by Lou Barlow, and "Watch Me Jumpstart", covered by La Sera.